Before you can run interest on arrears, there are a few things that need to be set up. All of these things would be within a relevant community
1. Interest on Arrears Management
1.1 Interest Set Up
Navigation: Community Level > Settings > General
- Interest %: the community's percentage at which interest must be raised. The industry maximum is 24% per annum. However, it is normally determined by the trustees.
- Interest-exempt threshold: is a specified amount that dictates what balance is automatically exempt from Interest, should balances be below this amount.
For example: if the threshold is set at R100.00 and the customer has a balance of R99.99 and lower, they will not be charged for interest. |
1.2 Default Billing Set Up
Navigation: Community Level > Settings > Default Billing Setup
This default billing will be set up during the Take-On process via WeconnectU, however, it is always best practice to check if all default billing accounts are correctly set up.
1.3 Run Interest of Arrears
Navigation: Community Level > Finance > Customer > Interest on Arrears
Select the Interest Date and the Journal Date.
The Interest Date dictates on what balance of the customer the interest should be raised, thus, the interest will be raised on the balance as at the date selected in the Interest date field.
The Journal Date is the date at which the interest journal will be recorded in the customer and general ledger.
Should any customer be exempt from interest, Click on the white flag icon and select Exempt Status:
To run the interest, scroll to the bottom of the page and click on Submit Interest Billing
This will produce a journal that will be posted against every customer account that has an arrear balance higher than the interest threshold. The contra account will be the account chosen as the default billing account.
Was this article helpful?
That’s Great!
Thank you for your feedback
Sorry! We couldn't be helpful
Thank you for your feedback
Feedback sent
We appreciate your effort and will try to fix the article